TATA Steel clears Hurdles to Acquire Bhushan Energy as NCLT gives Approval for its Acquisition

As per the latest updates, after acquiring Bhushan Steel in May last year, Tata Steel is also set to take control of its subsidiary Bhushan Energy as NCLT (National Company Law Tribunal) on Thursday approved the resolution plan of Tata Steel to acquire debt-ridden Bhushan Energy for around INR 800 crore.

Under the resolution plan, Tata Steel will make an upfront payment of INR 730 crore and would also make an additional payment of INR 50 crore to the operational creditors of the company. Along with this Tata Steel would also infuse INR 367 crore into the company as a part of equity infusion.

With this, the principal bench of NCLT Delhi has rejected objections from Bhushan Energy's former promoter Neeraj Singhal opposing Tata Steel's bid.

Till the time Tata Steel takes over the company and starts running it, the Committee of Creditors and the resolution professional of the company will act as monitoring agency to oversee the day to day functioning of the company, the NCLT said. A detailed copy of the order is awaited.

Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. In FY2015-16, Bhushan Energy had reported a gross debt of INR 2,336 crore.

The company was taken to the NCLT by State Bank of India (SBI) for not paying its dues worth INR 500 crore. In June last year, NCLT had extended the insolvency resolution period for 90 days after the creditors failed to find a suitable buyer within the initial period of 180 days as mandated under the Insolvency & Bankruptcy Code (IBC).

Bhushan Energy was a subsidiary of Bhushan Steel Ltd until May last year till Tata Steel acquired the latter and renamed it as Tata Steel BSL Ltd. Tata Steel had offered INR 35,200 crore in cash to acquire Bhushan Steel besides INR 1,200 crore to creditors and convert the remaining debt owed to banks to equity.